The Digital Asset Market CLARITY Act, which cleared the House on July 17, 2025 by a 294–134 vote, is facing a new round of criticism as the Senate weighs what to do next. The latest pressure point comes from former CFTC Chair Christopher Giancarlo, who has argued that the bill may ultimately do more for banks than for crypto-native firms. That framing has shifted the debate from whether the bill brings clarity to who actually benefits from that clarity once it arrives.
Supporters still present the Act as a long-overdue attempt to draw a cleaner line between the Securities and Exchange Commission and the Commodity Futures Trading Commission. The logic is straightforward: if the market finally knows which agency oversees which types of digital assets, firms can build products, custody systems, and trading infrastructure with less legal guesswork. For many in the industry, the bill’s main promise is not deregulation but predictability.
The fight is no longer just about jurisdiction
That said, the jurisdictional issue is only part of the story now. Critics are increasingly focused on what the reallocation of authority could mean in practice for exchanges, token issuers, and custodians. A clearer boundary between the SEC and CFTC may reduce one layer of uncertainty, but it could also reshape how certain tokens are treated and what compliance burdens attach to platforms handling them. What looks like clarity at the regulatory level can still create winners and losers at the commercial level.
That is why the debate has become more politically and economically charged. CFTC Chairman Michael Selig has publicly urged the Senate to move the bill forward, arguing that it would make the United States the “gold standard” for digital-asset regulation. But the more the legislation is discussed, the more it is being judged not just on legal elegance, but on whether it opens the market fairly or tilts the field toward incumbents.
Stablecoin yield has become the bill’s most explosive fault line
The sharpest conflict has formed around one specific issue: whether platforms should be allowed to offer yield on stablecoin balances. Reports have indicated that major banks are pushing for restrictions or a full ban on those rewards, a position widely interpreted as an effort to protect traditional deposit economics. What began as a technical policy dispute has turned into a direct fight over who gets to monetize digital dollars.
That disagreement has already had real consequences. A White House compromise effort reportedly broke down on March 5, 2026, after banks rejected the proposal, and Senate progress has remained stalled since then. In practical terms, this means the most commercially sensitive part of the bill is also the one most capable of delaying or reshaping it.
Former regulators are split on whether CLARITY solves more than it creates
The division is not only between banks and crypto firms. Former regulators themselves have offered very different readings of the bill. Giancarlo’s view is that legal certainty is exactly what large banks need before they commit serious capital to digital-asset infrastructure. In his reading, the bill could accelerate institutional participation precisely because it reduces the ambiguity that has kept traditional finance cautious.
Others are far less convinced. A former SEC Chief Accountant warned in January 2026 that some parts of the bill could unintentionally recreate conditions that contributed to earlier market failures, drawing a comparison to the environment around the FTX collapse. Another former CFTC chair has argued that the legislation may layer new complexity onto the market rather than removing it. The split among former officials reflects a deeper uncertainty about whether structure alone can fix a market whose risks are often embedded in business models, not just in legal definitions.
The bigger question is who captures the next phase of crypto finance
That is the tension running through the whole debate. On one side is the argument that better market structure rules are essential if the U.S. wants to attract capital, custody investment, and regulated product growth. On the other is the concern that those same rules could consolidate power in the hands of banks and other large incumbents, especially if stablecoin-related restrictions cut off one of the few commercial edges crypto-native platforms still have. The bill is being judged not only as a regulatory framework, but as a competitive map of the next phase of digital finance.
For banks and custodians, a clearer division of authority would likely lower legal risk and make it easier to invest in settlement, custody, and trading infrastructure. For exchanges and issuers, the picture is more mixed. The same legal clarity could come with tighter limits on product design, new audit or reporting expectations, and fresh constraints on customer yield programs. In that sense, the CLARITY Act may simplify the rulebook while making some crypto business models harder to sustain.
The Senate remains the next major checkpoint, but timing and substance are still uncertain. Selig’s push to get action by early March did not resolve the bill’s central political disputes, and the final text could still change materially if lawmakers try to bridge the fight over stablecoin economics. Until then, the core question remains open: will the CLARITY Act bring institutional capital into crypto on fairer terms, or will it do so in a way that strengthens banks more than the industry it claims to clarify?
